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Financial planning for the future seems to be in the air
Planning for the future seems to be in the air. Perhaps the recent tax season has started folks thinking about protecting their family’s legacy. I’ve received several inquiries of late regarding estate planning – the advantages of living trusts in particular. Allow me to share some estate planning basics:
A living trust is a legal document that is separate from a will. With a living trust, your assets are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you pass.
Most people name themselves as the trustees in charge of managing their trust’s assets. This way, even though your assets have been put into the trust, you can remain in control of your property during your lifetime.
A living trust can be the most important part of your estate plan. A living trust agreement:
” Gives the trustee the legal right to manage and control the assets held in your trust.
” Instructs the trustee to manage the trust’s assets for your benefit during your lifetime.
” Names the beneficiaries who are to receive your trust’s assets when you die.
” Gives guidance and certain powers and authority to the trustee to manage and distribute your trust’s assets.
If you are the trustee of your own trust and you become incapacitated, your chosen successor trustee would manage the trust’s assets for you. However, if your assets were not in a living trust, there could be dispute over who manages your property.
Without a living trust, your estate could be subject to probate. Probate is a court-supervised process for transferring assets to beneficiaries. A petition would be filed with the court, notices given and a hearing would be held. Probate can take more time to complete than distribution through a living trust. Additionally, assets tied up in probate may not be as readily accessible to the beneficiaries as those held in a living trust. The cost of probate is often greater than the cost of managing and distributing comparable assets held in a living trust.
Living trusts aren’t a clear benefit to everyone. Young married couples without significant assets and without children may not benefit from having a living trust. Older couples with significant assets and specific wishes for their disbursement may benefit more from living trusts.
I will hold a special workshop on Saturday May 31st to offer more in depth education on estate planning and living trusts. This is a free event open to the public. I hope you’ll join me at 10 am in the Fireside Room at the San Marino Center – located at 1800 Huntington Drive in San Marino. Please call my office at 626-943-8833 to reserve your seats.
Securities and advisory services offered through NATIONAL PLANNING CORP (NPC) member FINRA, SIPC, a Registered Investment Adviser. EH Financial Group, Inc. and NPC are separate entities and unrelated companies.
By Emmy Hernandez